THE ROLE OF THE PURCHASING DEPARTMENT IN PRODUCT INNOVATION: THE CASE OF FAST MOVING CONSUMER GOODS COMPANIES IN FRANCE.

Abstract

The globalization of the business environment over the last decades and the increase of the competition between global retail firms have forced the companies to reorganize their internal organization and some functions that were support activities in the past have now become strategic primary functions. The purchasing department is one of these functions. This thesis is studying how the purchasing function is incrementally integrating marketing aspects in order to be a driver of product innovation inside FMCG companies. Much has been studied in the literature about the interaction between the purchasing and marketing department, but the integration of marketing aspects in the function has been globally understudied. Previous studies have also proved that the purchasing department has to be involved in the new product development and the capture of innovation. However this study aims to explore the causal relation between theses two aspects, meaning how the integration of marketing aspects in the purchasing function is enhancing product innovation. From a theoretical point of view, a literature review has been conducted concerning the concepts of purchasing, marketing and innovation and how theses concepts are connected with each other, in order to have a better global understanding of the key elements. From an empirical point of view, the study case analyses the role of the purchasing function in product innovation for four Fast Moving Consumer Goods companies in France by interviewing eight respondents. This study case highlights why the marketing aspects are now intrinsic to the purchasing function and how this integration is enhancing the capture of product innovation. The main finding is that nowadays a buyer in the retail sector has to have a very strong customer (or market) orientation in order to be able to find successful product innovation. Finally the thesis makes a contribution to the existing literature by proposing a new definition of the purchasing function towards product innovation. This new definition is drawn in the form of a summary scheme.